Why Banks Must Bite the Innovation Bullet
A fact clearly ratified, recently, by findings of an independent study of more than 80 retail banks in Europe undertaken jointly by Infosys and European Financial Management Association (EFMA) which clearly brought out the importance of innovation. The banks, spread over Central & Eastern Europe, Russia &CIS and Western Europe, recognise the role of innovation as a driver of future growth and efficiency and nearly 3 out of 4 nurse aspirations of emerging as innovation leaders within their own markets.
That said, they’re only at the beginning of the journey – only 37% of respondents are ready with their innovation strategy, and the perceived importance of innovation to improving efficiency and customer relationships is yet to be matched by commensurate efforts.
Still, I believe this study holds much insight for banks as it throws light on issues such as the relative merits of strategic and incremental innovation and barriers to each, besides describing the experience of successful innovators. Interestingly, Information Technology, which is perceived as a key enabler of innovation, is also cited as one of the biggest barriers by those banks that are running on legacy systems. They can draw inspiration from the experience of banks in Central & Eastern Europe, especially Turkey, that are modernising their systems to power their growth innovation agendas. On the flip side, lack of ideas is perceived as the lowest barrier and most banks encourage generation of new ideas by employees.
In my view, that’s as good a place to start as any!
Read the Infosys and EFMA Innovation Report here.
